Sonic Healthcare Financial Analysis

Sonic Healthcare Limited's 2008 Annual Report can be found on their website at: www.sonichealthcare.com/investor-information/annual-report.aspx. The following information can be located in this report.

| |Pages |
|Income Statements |46 |
|Balance sheets |47 |
|Cash flow statements |49 |
|Notes to the financial statements |50-62 |

In addition to the above, the following year 2006 information is extracted from Sonic Healthcare
(http://www.investopedia.com)

Formula: Cash flow from operations to current liabilities = Cash Flow from Operations / Current Liabilities

2007: Cash flow from operations = $267,935,000 Current liabilities = $705,582,000 Current ratio = $267,935,000 / $705,582,000 = 0.3797362

2008: Cash flow from operations = $331,885,000 Current liabilities = $831,193,000 Current ratio = $331,885,000 / $705,582,000 = 0.47037056

Efficiency ratios
d) Debtors'
It is calculated by dividing sales in dollars by assets in dollars.

Formula: Asset Turnover = Revenue / Assets

2007: Revenue = $1,886,081,000 Assets = $2,900,462,000 Asset Turnover = $1,886,081,000 / $2,900,462,000 = 0.650269

2008: Revenue = $2,380,327,000 Assets = $3,629,001,000 Asset Turnover = $2,380,327,000 / $3,629,001,000 = 0.655918

k) Return on Assets For this assignment please use the following formula shown in Note ** to Table 14.1 in your prescribed text: (net profit + interest + income tax) / average total assets

Asset Turnover is termed as the amount of sales generated for every dollar’s worth of assets. It is calculated by dividing sales in dollars by assets in dollars.

Formula: Return on Assets = (Net Profit + Interest + Income Tax) / Average Total Assets

2007: Net Profit = $210,054,000 Interest = $50,473,000 Income tax = $80,402,000 Average Total Assets = $2,900,462 Return on Assets = ($210,054,000 + $50,473,000 + $80,402,000)